Informing the public about the Federal Reserve
What is the Federal Reserve doing to help decrease the likelihood of another financial crisis?
In response to the recent financial crisis, there has been a comprehensive re-thinking and reform of financial regulation, both in the United States and around the world. Among the core objectives of both the Dodd-Frank Wall Street Reform and Consumer Protection Act and the global regulatory reform effort are to:
- Enhance regulators' ability to monitor and address threats to financial stability,
- Strengthen both the oversight of and ability to safely wind down systemically important financial institutions, and
- Improve the capacity of financial markets and infrastructures to absorb shocks.
In doing our part to implement the statute, the Federal Reserve is committed to developing rules that are economically sensible, appropriately weigh costs and benefits, protect smaller community institutions, and promote the sound extension of credit.
In addition to our work to implement the Dodd-Frank Act, the Federal Reserve has taken a number of steps to enhance oversight of the financial institutions we supervise. In particular, we have reoriented our supervision of large institutions to focus not just on individual institutions, but on the financial system as a whole. We have brought together a team from throughout the Federal Reserve System, including economists, banking supervisors, and experts in markets and payments, to supervise the largest banking institutions with a focus on potential risks to the financial system. And we have created the Office of Financial Stability Policy and Research to help monitor global financial risks and analyze the implications of those risks for financial stability.
Complementing these efforts, the Federal Reserve has been working with domestic and international bank supervisors to develop stronger capital and liquidity requirements for large, internationally active banking firms.